Deductible

When you purchase comprehensive or collision coverage on your car insurance policy, you choose an amount that you will pay before your car insurance company covers the rest of the repair costs. Amounts for deductibles can range from $250 to $1500 on average. The higher the deductible, the lower your car insurance policy cost.

Keep in mind, however, that while higher deductibles save you money now, they may be difficult to pay if you are in a car accident. For many people, coming up with $1500 instantly is difficult, so when you choose your deductible amount, you should choose the amount of money you can come up with easily should you need to file a claim on your car insurance policy.

If your car needs $2000 in repairs after an accident and your deductible is $500, you must pay this amount before your car insurance company will pay the remaining $1500. If the damages are under what your deductible is, you will be responsible for the entire amount.

If you drive an older car, it may not be necessary to choose a low deductible. Damages to an older car may cost more to repair than the actual value of the car. In this case, it would be best to salvage the car and buy a new one. If you drive an older car, you can choose a high deductible to save you money on your car insurance.